TORONTO – The chief financial officer of Menu Foods sold about half his shares in the company just three weeks before a massive recall of its pet food products, Canadian insider trading reports show.
CFO Mark Wiens sold 14,000 shares for $89,900 on Feb. 26 and Feb. 27. The shares are now worth about $54,000.
"He feels just awful that this link has been made," company spokesman Sam Bornstein said Wednesday.
But Bornstein said Wiens faced a restricted window in which he could sell his shares.
A blackout period related to the company's fourth quarter results prevented Wiens from trading until Feb. 19, Bornstein said. Wiens sought permission in writing from the CEO to trade then, a standard practice, he said.
Wiens currently owns about 17,000 shares.
Menu Foods began getting calls about sick cats around Feb. 26, but Bornstein said Wiens would not have known about them due to the size of the company. The calls didn't cause alarm until a week later.
"He is a highly principled guy and for the amount of money that we are talking about, for him to imperil his career, it just doesn't make any sense," Bornstein said.
"He's a leader of high standards in that company," he said. "That sort of thing would just be completely out of character."
Wiens called it a "horrible coincidence" in Canada's Globe and Mail newspaper. He did not immediately return phone calls Wednesday and Bornstein said Wiens didn't want to talk about his shares any more.
On March 16, Menu Foods recalled 60 million cans of dog and cat food after the deaths of 16 pets that ate its products, mostly cats. The U.S. Food and Drug Administration said tests indicated the food was contaminated.
Menu Foods was the first of at least six companies to recall pet food and treats made with the tainted Chinese wheat gluten. The company has recalled 100 brands of pet food, sold throughout North America under private and major labels.
The FDA has blocked wheat gluten imports from the Chinese company while it investigates.
This week, a large veterinary hospital chain says it recorded a 30 percent increase in kidney failure among cats during the three months that the contaminated pet food was sold.
Banfield, The Pet Hospital, based its analysis upon records collected by more than 615 veterinary clinics.
The analysis suggests that out of every 10,000 cats and dogs seen in Banfield clinics, three suffered kidney failure. The tainted food appears to have been more toxic to cats than to dogs.